Correlation Between Mayfield Childcare and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Mayfield Childcare and Westpac Banking at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mayfield Childcare and Westpac Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mayfield Childcare and Westpac Banking, you can compare the effects of market volatilities on Mayfield Childcare and Westpac Banking and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mayfield Childcare with a short position of Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayfield Childcare and Westpac Banking.
Diversification Opportunities for Mayfield Childcare and Westpac Banking
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mayfield and Westpac is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mayfield Childcare and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking and Mayfield Childcare is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mayfield Childcare are associated (or correlated) with Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of Mayfield Childcare i.e., Mayfield Childcare and Westpac Banking go up and down completely randomly.
Pair Corralation between Mayfield Childcare and Westpac Banking
Assuming the 90 days trading horizon Mayfield Childcare is expected to under-perform the Westpac Banking. In addition to that, Mayfield Childcare is 23.04 times more volatile than Westpac Banking. It trades about -0.06 of its total potential returns per unit of risk. Westpac Banking is currently generating about 0.08 per unit of volatility. If you would invest 9,932 in Westpac Banking on September 3, 2024 and sell it today you would earn a total of 100.00 from holding Westpac Banking or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mayfield Childcare vs. Westpac Banking
Performance |
| Timeline |
| Mayfield Childcare |
| Westpac Banking |
Mayfield Childcare and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayfield Childcare and Westpac Banking
The main advantage of trading using opposite Mayfield Childcare and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayfield Childcare position performs unexpectedly, Westpac Banking can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Westpac Banking will offset losses from the drop in Westpac Banking's long position.| Mayfield Childcare vs. Westpac Banking | Mayfield Childcare vs. Champion Iron | Mayfield Childcare vs. iShares Global Healthcare | Mayfield Childcare vs. Peel Mining |
| Westpac Banking vs. Kip McGrath Education | Westpac Banking vs. Alto Metals | Westpac Banking vs. Leeuwin Metals | Westpac Banking vs. Centaurus Metals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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